The AO noted in the assessment order that the assessee society is running maternity hospital and all services pertaining to maternity only. Maternity is a natural process and could not be termed as illness or disease. Giving birth and at that time hospital providing services for delivery could not be said to be providing any treatment for illness or mental defectiveness.
The Chartered Accountant has not only the duty to defend the case of litigant to the best of his ability, but equally has duty to maintain dignity and decorum of the courts. He has to assist the Bench as per law in arriving at the just decision in the matter.
In this case Shri B.D. Giri, ITP referred to section 288(2)(v) & (vi) of the IT Act and claimed that since he is retired departmental Officer, therefore, without any certificate of registration as ITP can appear before the Income-tax Authorities and the Tribunal.
It is not the case of the assessee that payment of such commission is as per prevailing practice of the trade. When supply of goods is made to Government Departments, commission is not allowable unless it is established that commission was paid for services other than services related to supply of goods to Government Department. As regards working of Government Department, we are of the view that public officials are expected to discharge their duties dispassionately, and decide on the merits of each case.
One of the contention of the ld. Departmental Representative that Section 12AA(3) has been amended w.e.f. 01.06.2010 wherein power has been given to cancel registration under section 12A(1) of the Act. In that case the CIT cancelled registration under section 12A of the Act after 01.06.2010, therefore, the fact is different than case under consideration. This contention of the ld. Departmental Representative is not acceptable in the light of above discussions that the CIT cancelled registration under section 12A w.e.f. 2009-10 which is the period prior to 01.06.2010. The C.B.D.T. has also clarified that the amendment in section 12AA(3) is applicable from A.Y. 2011-12.
The ld. CIT(A) considered the issue in detail in the light of exceptions provided under Rule 6DD in order to grant relief to the assessee for violation of section 40A(3) of the IT Act. The finding of fact recorded by the ld. CIT(A) to the effect that the assessee was a Pakka Arahtia and made purchases from Kachcha Arahtias have not been disputed by the ld. DR during the course of arguments. It is also not in dispute that the assessee acted as per Krishi Utpadan Mandi Samiti Rules.
On perusal of the A.O.’s order and material on record, we find that the CIT invoked section 263 of the Act because the CIT did not feel satisfy with the conclusion made by the A.O not on account of that the order of the A.O. was erroneous. The CIT invoked section 263 of the Act simply on account that the A.O. did not carry out the investigation of the case on the line of investigation as CIT wants.
If we consider the facts of the case as stated above that neither the Revenue authorities nor the assessee has brought on record any material or evidence in support of the determination of annual value of properties, however, the assessee has furnished evidence in respect of annual value determined by municipal/local authority, Agra Nagar Nigam in support of annual value of concerned properties.
Whether this agreed addition is to be added while calculating book profit under section 115JB of the Act. Section 115JB provides that where in the case of an assessee being a Company, the income tax payable on total income as computed under this Act is less than 10% (applicable in the impugned Assessment Year) of its book profit, such book profit shall be deemed to be the total income of the assessee.
Since grant of registration is a condition precedent for grant of exemption under section 11 and in this case, there is no registration granted under section 12AA in favour of the assessee, no relief or exemption can be granted to the assessee under section 11.
